After reaching a low at .9761 last week, the March Australian Dollar has settled inside of a small range bounded by a 50 percent price at .9901 and a 61.8 percent price at .9744. This percentage retracement zone was created by the main range of .9233 to 1.0569.
In addition to this retracement zone, an uptrending Gann angle from the .9223 main bottom is providing support at .9773. Currently the currency is walking down a downtrending Gann angle from the 1.0569 top at .9829.
These two angles cross within the next 1 to 2 days. A break under this cluster could put some serious downside pressure on the market. Crossing to the bullish side of the downtrending angle doesn’t necessarily mean the market will rally, but given the current volatility, it is likely to continue straddling the slower moving uptrending Gann angle. I can’t see any sign of a rally until the 50 percent level at .9901 is crossed.
Overnight, the Australian Dollar is showing some strength on the heels of the minutes of the Reserve Bank of Australia‘s last meeting. This report showed that central bank policymakers saw continued expansion in the domestic economy despite the turmoil in Europe due to the sovereign debt crisis. The RBA’s main concern is that the European debt crisis will lead to a slowdown in global growth.
Contact market analyst James A. Hyerczyk at patternpricetime.com
